JDA, Ford Credit price, new Fords fizzle while JDA sizzles; American Axle, others slate deals

By Paul Deckelman and Paul A. Harris

New York, Dec. 7 - JDA Software Group Inc. and Ford Motor Credit Co. were heard by high yield syndicate sources to have each successfully priced a new bond issue on Monday - JDA's a scheduled $275 million forward calendar offering of five-year notes, what Ford Credit's $750 million 10-year issue was an opportunistically timed drive-by deal.

When the new bond issues were freed for secondary dealings, trader said, the JDA bonds firmed smartly, rising as much as 3 points from their issue price. However, Ford Credit's new offering spun its wheels, ending the day trading below issue.

Elsewhere in the primary arena, the already crowed forward calendar got even more so on Monday, with new deals announced by American Axle & Manufacturing, Inc., Georgia Gulf Corp., Invitel Holdings A/S and Rexel SA -- the latter two transactions euro-denominated.

Participants also heard offerings being shopped around by Goodman Global Group, Inc. and McJunkin Red Man Corp.- the latter the biggest prospective new deal to make the rounds, weighing in at $1 billion. Most of the new-deal issuers were heard to have already begun roadshows, or, at least, were preparing to hit the road, and the American Axle, Georgia Gulf and Goodman Global offerings are expected to be priced late this week, along with other deals already on the calendar such as Bumble Bee Foods, LLC and Primus Telecommunications Holding Inc.

While those deals were coming onto the calendar, another offering dropped off, as First Ship Lease Trust announced that it would not be going through at this time with the $200 million seven-year deal which it had been shopping; the Singapore-based company cited the recent market turmoil connected with Dubai World's efforts to delay its debt payments, but said it did not need the anticipated proceeds right away.

In the secondary realm, apart from the behavior of new bonds which have already priced, like JDA, Ford Credit and Friday's deal from Quintiles Transnational Holdings Inc., American Axle's existing issues firmed solidly in apparent response to the company's upcoming new deal. Also firmer was Clear Channel Communications Inc., with The Wall Street Journal reporting the company is in talks with its lenders to raise as much as $2.5 billion in the high-yield market.

Ford Credit brings $750 million

During Monday's primary market session, Ford Motor Credit Co. LLC priced a $750 million issue of 8 1/8% 10-year notes at 98.304 to yield 8 3/8%.

Initial guidance had the deal coming in the low-8% range.

Banc of America Securities LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Morgan Stanley & Co. Inc., Barclays Capital Inc., Citigroup Global Markets Inc. and Calyon Securities (USA) Inc. were the underwriters.

The deal priced off the investment grade desk.

JDA prices at wide end

Elsewhere JDA Software Group, Inc. priced a $275 million issue of 8% five-year senior notes (B1/B+) at 98.988 to yield 8¼% on Monday.

The yield came at the wide end of the 8% to 8¼% price talk.

Goldman Sachs & Co. was the left lead bookrunner. Wells Fargo Securities was the joint bookrunner. J.P. Morgan Securities Inc. was the co-manager.

Proceeds, along with cash on hand, will be used to fund the cash portion of the acquisition of i2 Technologies, Inc.

McJunkin to bring $1 billion

The calendar of deals to price during the run-up to year-end built on Monday.

McJunkin Red Man Corp. will begin a roadshow on Wednesday for its $1 billion offering of seven-year senior secured notes.

The roadshow wraps up on Dec. 15, with the notes expected to price after.

Goldman Sachs & Co. is the left bookrunner. Barclays Capital is the joint bookrunner.

Proceeds will be used to repay bank debt.

American Axle markets $400 million

American Axle & Manufacturing, Inc. began a roadshow on Monday for its $400 million offering of seven-year senior secured first-lien notes.

The roadshow wraps up on Thursday.

The notes are expected to price before the end of the week.

JP Morgan and Bank of America Merrill Lynch are joint bookrunners for the debt refinancing.

Goodman Global to sell discount notes

Meanwhile Goodman Global Group, Inc. announced that it intends to raise $320 million of proceeds via the sale of five-year senior discount notes.

The company will market the deal on a roadshow that began on Monday, wraps up on Friday, and is expected to price later that day.

JP Morgan has the books.

Proceeds, together with cash on hand, will be used to pay a dividend to shareholders and a distribution to optionholders.

The issuer is a Houston-based manufacturer of HVAC products.

Invitel sets price talk

Hungary's Invitel (Magyar Telecom BV) set price talk for its €340 million offering of seven-year senior secured notes at 9¾% to 10%, with 1 to 2 points of original issue discount.

The deal is expected to price on Tuesday.

Credit Suisse is the bookrunner for the Rule 144A/Regulation S offering. Calyon Securities and BNP Paribas are joint bookrunners.

Rexel to sell €500 million

France's Rexel will begin a brief roadshow on Tuesday for a €500 million offering of seven-year senior notes.

The roadshow wraps up on Friday.

Calyon Securities, RBS Securities and Bank of America Merrill Lynch are global coordinators and bookrunners for the Regulation S offering. BNP Paribas, HSBC and Natixis Bleichroeder are joint bookrunners.

Proceeds will be used to refinance existing debt.

Credit ratings remain to be determined.

Rexel is a Paris-based manufacturer of low voltage electrical products.

Aquilex marketing $225 million

Finally, Aquilex Holding is in the market with a $225 million offering of seven-year notes.

Credit Suisse, Morgan Stanley and RBC Capital Markets are leading the deal.

Proceeds will be used to refinance debt.

New JDA bonds jump

The star of the day Monday among the new or recently priced issues was JDA Software's 8% notes due 2014. When the Scottsdale, Ariz.-based supply chain services provider's issue was freed for secondary activity, they "did pretty good," said a trader, getting as good as 101¾ bid, 102 offered - well up from 98.988 level at which the deal had priced.

Another saw the new bonds at 101 bid, 102 offered .

Yet another said seeing such a rise "was nice on a day like today."

Ford just can't get started

While the JDA Software issue was hot, the new Ford Motor Credit 8 1/8% notes due 2020 definitely were not.

A trader said the bonds had traded at 97¾ bid, 98 3/8 offered when they were freed, with the offer level "just a few pennies above their issue price," he noted. The Dearborn, Mich.-based automotive financing arm of Ford Motor Co. had priced its $750 million issue at 98.304 to yield 8 3/8%.

"Right out of the box," a trader said, "it was offered at 98 3/8, slightly above issue price," before settling in at 973/4-981/4.

"That's one Ford you don't want to be driving," he quipped.

New Quintiles bonds hold gains

A trader said the new Quintiles Transnational Holdings' $525 million issue of 9½% senior unsecured notes due 2014 at par bid, 101 offered, pretty much in line with the levels seen late Friday, after the Research Triangle Park, N.C.-provider of services to the pharmaceutical industry priced its transaction - upsized from the initially planned $400 million -- at 98 to yield 10.012%

New Essar Steel active, but little changed

A trader saw Essar Steel Algoma Inc.'s 9 3/8% first-lien senior secured notes due 2015 at 99¼ bid during the day's early trading, "then we saw them tighten up" to 98¼ bid, 98¾ offered.

"We heard there was some activity" in the credit, "there were flippers in it."

He added that "we just needed to clean them out."

The Sault Ste. Marie, Ont.-based steelmaker - part of the Mumbai, India-based Essar Group industrial conglomerate - had priced its $400 million issue, upsized from the original $325 million, late in the session on Friday at 98.51376 to yield 9¾%. Traders said it came too late in the day for any aftermarket activity at that time.

Another trader Monday saw the bonds at 98¼ bid, 99 offered.

Recent Hanesbrands hangs in there

A trader saw Hanesbrands Inc.'s recently priced 8% senior notes due 2016 trading at 100 5/8 bid, 100 7/8 offered, about in line with were the levels seen late last week.

The Winston-Salem, N.C.-based apparel manufacturer, well-known for its branded underwear and hosiery products for men, women and children, priced its $500 million issue last Thursday at 98.686 to yield 8¼%, and those new bonds quickly firmed to above par, where they have remained.

Existing American Axle issue up on new deal news

A trader said that American Axle & Manufacturing's bonds - which had risen sharply on Friday - "were active again" Monday in the wake of the company's announcement of plans for a seven-year secured bond deal.

He saw its 5¼% notes due 2014 at an "89ish" level, which he said was up several points, and saw its 7 7/8% notes due 2017 ending around 82, which he also called up a couple of points, on "some trading as well"

Another trader speculated that "somebody must have heard something somewhere" about the Detroit-based automotive components manufacturer's upcoming new deal on Friday in trying to explain the rise, which at the time seemed inexplicable.

New deal report spurs Clear Channel

A trader said of the news that Clear Channel Communications is looking to arrange as much as $2.5 billion of financing, "that's why" the company's bonds had been rising over the previous several sessions.

He saw the San Antonio, Tex.-based broadcasting and outdoor advertising company's 11% notes due 2016 "trading down" at 61½ bid, to be left at 61¼ bid, 61¾ offered. "Earlier, they had traded a little bit higher."

However, a trader at another desk saw the 11s "up a couple of points" around the 62½ level, and called the credit "an active issue."

Yet another noted that the bonds had traded in a 581/2-60½ context last week, but had firmed to 61½ on Monday.

He also saw the company's 10¾% notes due 2016 "pretty much unchanged" from last week's 68 level, while its 7¼% notes due 2027 had firmed to 42-44 from prior levels at 41 bid, 43 offered.

Another trader saw the 103/4s "wrapped around" 68, while the 7¼% notes were likewise "wrapped around" 43.

Those bonds had risen last week as well, with traders mentioning periodic speculation that the debt-laden company was looking to do a new deal of some sort to buy itself some breathing room by taking out near-term debt maturities.

That speculation took a more concrete form on Monday as The Wall Street Journal reported that Clear Channel's outdoor advertising business is actually in talks with lenders to raise as much as $2.5 billion in the high-yield market, in order to pay off a big debt which Clear Channel Outdoor owes to its parent, Clear Channel Communications. Such a deal would, in turn, prevent Clear Channel Communications from violating covenants on its secured debt.

Attributing its information to unidentified "people familiar with the situation," the paper indicated that a junk financing deal "will likely come in the next two weeks," although the precise timing and size remains uncertain."

Logjam ahead?

If Clear Channel does choose to try to sell such a big new deal before the year is out, the company will have to take a number and get in line, with well over a dozen deals already being shopped around and expected to price in the next two weeks, including several other mega-deal sized issues, from names such as McJunkin Red Man and Expro Finance Luxembourg SCA, as well as numerous smaller deals from the likes of Birch Communications Inc., Bumble Bee, DuPont Fabros Technology LP, Dollar Financial Corp., Primus Telecom and United Maritime Group LLC, to name just a few.

"That money had better keep coming into the high yield market," a trader observed with a laugh, "or some bonds had better start maturing" in order to provide the cash that will be needed if investors are to swallow all of these new deals.

The clock, meanwhile is ticking away towards the inexorable point at which the primary market will have wound down for the year, heading into the holidays.

"I don't know if [all of the prospective issuers] are going to be able to get this done, with this amount, and the holidays" coming up.

Market indicators keep rising

Back among statistical measures of market performance not related to the new-deal market, a trader saw the CDX Series 13 index up ¼ point on Monday at 95 bid, 95½ offered , after having risen by 3/8 point on Wednesday, Thursday and again on Friday.

Meanwhile, the KDP High Yield Daily Index rose by 13 basis points on Monday, to 70.23, on top of the 15 bps gain seen on Friday. Its yield narrowed by 1 bp to 8.41%, after having come in by 4 bps in each of the previous two sessions.

In the broader market, advancing issues stayed ahead of decliners for a fifth straight session, by a better than seven-to-six margin.

Overall market activity, as measured by dollar-volume, fell about 8% from Friday's pace.

A trader characterized Monday's session as "a little quiet today."

A second concurred - but noted that "there's something like 11 new deals on the calendar for this week, so most of the people have just been gearing up for those," in explaining the relative lack of overall market activity.

Junkbondland "had a kind of a Monday feel to it," yet another trader suggested. "And we're getting close to the end of the year, where everyone is closing their books. They've booked their profits and locked them in and are saying 'let's not mess anything up till after the new year'."

Accordingly, he said, "people are doing things if they have to - but they're not really stretching to get things done."

CIT paper pops up

Among specific issues, a trader said that CIT Group Inc.'s bonds "jumped a few points," with the short-end bonds at 75 bid, which he said would cover "most of that paper - '09, 2010. He said the "really shorter stuff," such as the 4 1/8% notes that were to have come due back on Nov. 3, were up as much as 5 or 6 points, around 75. He saw "some trading" in the name.

He said the New York-based commercial lender's somewhat longer-dated paper was also at 74-75, which he called a 3 point gain on the day.

Smurfit-Stone holds gains

A trader said that Smurfit-Stone Container Corp.'s bonds were "right around" 86, with issues like its 8¼% notes due 2012 "holding at the higher levels from the end of last week." The Chicago-based packaging company's bonds had risen after it formally submitted its reorganization plan to the bankruptcy court judge overseeing its restructuring - a plan which envisions giving bondholders and other unsecured creditors virtually all of the equity in the restructured company.

Nakheel lower again

A trader said that Dubai development company Nakheel's bonds "were down a little from where they were on Friday," seeing its 3.172% notes slated to come due on Dec. 14 - a week from Monday - at 51-52 and its 2¾% notes due 2011 also a few points lower at 41-43.

Dubai officials were reported to have had their first face-to-face meeting with international and regional bankers since their Nov. 25 declaration that Nakeheel parent Dubai World would ask for a six-month delay in paying its debt obligations, including the 3.172% bonds. The Financial Times reported that the meeting would likely be the "kick-off" for what is expected to be a long series of such meetings, as the banks and Dubai World try to thrash out a solution. It said that key creditors are expected to form a steering committee that would speak for all of them.

The paper further reported that there was "a range of views" among the lenders as to whether the Dec. 14 bonds should be included in any standstill that the banks might agree to - or whether, as some lenders contend - the big issue "has to be repaid at all costs."

On Friday, the 2011 bonds had been quoted at 43-45, "about where they had been," a trader said, while the Dec. 14 bonds had fallen to 55-57, down from prior levels around 58-60, as the creditors held a conference call with their lawyers to discuss their response to government effort to restructure its debt.

The Dec. 14 bonds had been trading as high as 110 bid before the Nov. 25 debt warning announcement from Nakheel, while the 2011 bonds had hovered in the 80s before that news hit the markets.

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